Shell Canada Limited: Kaybob Duvernay Land Divestiture

Sayer Energy Advisors has been engaged to assist Shell Canada Limited with the marketing of certain of its Duvernay rights in the Kaybob area of northwestern Alberta.

At Kaybob, Shell holds a 100% working interest in a total of 50 sections of land with Duvernay rights. There is between four and five years remaining on the majority of the licenses.

The land has been proven to be productive for Duvernay oil. Shell commenced producing oil from a horizontal Duvernay well on the land in 2014. As of July 31, 2016, the 12-04 well had produced a total of over 59,000 barrels of oil from the Kaybob Duvernay “L” Oil Pool.

Shell’s maps of the Duvernay Formation at Kaybob show that the Company’s land is underlain by a gross Duvernay thickness of 45-50 metres, with a net reservoir thickness of 30-40 metres. In addition, the porosity in the Duvernay on Shell’s land ranges from 4.5-5.5%, the TOC levels range from 2-3%, with hydrocarbon saturations ranging from 75-80%. The reservoir is over-pressured, with pressure in the area ranging from 34-46 MPa. The GOR in the Duvernay on Shell’s land is approximately 900 scf/bbl.

Summary information relating to this divestiture is attached to this correspondence. More specific information is available at www.sayeradvisors.com. A package of more detailed confidential information will be sent to any party executing a Confidentiality Agreement (copy attached).